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tv   Mad Money  CNBC  August 27, 2013 11:00pm-12:01am EDT

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>> my mission is simple. to make you money. i'm here to level the playing field for all invests. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i want fewer days like today. my job is to coach you through these moments. call me at 1-800-743-cnbc. didn't like today. didn't see anything to like about it.
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you are being asked buy and you are not being paid much to take the risk. the stocks are not down all that far. a 5% decline for the dow and a teenie amount for the nasdaq. that does not entice me. s&p 500 going down 1.59%. and nasdaq nosediving 2.16%. no panic, and volume was light. but why the heck did you have to do any buying today? i don't want to give up on this market. no, but yes, i think the beat down was deserved. and i don't think it's over. let's talk about what is changed that can make us go down and what's the same, that can allow us to bounce when the market pulls back a few points, which is where the current news probably takes. first is syria. we don't know what is going to
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happen in the middle east, but any time anything happens, you get a real sell off, you have to assume the worst. we have fought two wars and you cannot avoid the possible of a third. and what is happening in egypt, you cannot imagine of anything good. making matters more difficult is the fact that that is becoming a cold-war-esque moment. certainly not a side we are backing that we can see eye to eye with. the instability was not leading to anything beyond worry about what will happen and selling on that worry, now, though, oil is flying. it feels 1990 like. when iraq invaded kuwait, whichand not knock the market for a loop. it had a genuine bear market. it's not a situation like iraq 1 or 2. americans are tired of war. using poison gas is a war crime,
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so it has to be answered, it's the presidential line in the sand. getting ahead of when missiles are to be fired is either bravery or foolishness and we do not know which it will be. but the price of oil is spiking. gas will go still higher. that is a bad sign for a strapped consumer. this morning, john harwood interviewed treasury secretary jack lew and he made it clear that there will be no negotiations for the upcoming debt ceiling to keep borrowing for the deficit. that means not only will there be negotiations but the negotiations will be protracted, negative, acrimonious and terrible for the stock market. this morning, i was asked why that would matter to the market. what's new there if you wanted to know? isn't that business as usual? and the answer is two-fold, yes, nothing new, partisanship and
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ugliness dog. even the most ugly thing in washington like needing to pay the federal bills, but it does matter. every time we get this miserable wrangling, it kills the market every time it happens. take a look at the charts. the sequester knocked the market for a loop. does anyone think this time will be different? of course not. we could have been down 1% on that interview alone. i think it's obvious that they provide no up side, and all down side and the budget battle will be all about raising taxes on the rich, right? hey, come on. and the republicans saying they want to cut spending but will not present anything that is important to cut. neither side will see eye to eye. that is why we are in this position. it's truly silly that the fed is talking about a tapering before the debt ceiling negotiations. ben bernanke had to see this ahead.
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it's one of the few things that can be banked on is the damage that washington causes. memo to mr. bernanke, you have to come out and say tomorrow, that you will not do anything about tapering until the debt ceiling and the budget is taken care of. they are all about making everyone feel like they should do nothing but hanker down, right at this time, we are also going to get the news of the new fed chair. i'm still worrying about how the president gave bernanke the boot after helping the country. here is your hat, what's your hurry. so, we could get maximum confusion as the it goes into disagreement about the new fed chief. and that is not good for the market.
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summers is not a uniter, he is a divider. intrigue we do not need. these negatives are not yet priced in the market but they could slow the u.s. economy and when the economy slows, interest rates go down and that's an unmitigated positive, even if we get there by man made, man made, man made events. what a shame that this is happening now since we were enjoying the chinese and european turn arounds. fruits that made it less important that the u.s. has a overall growth course. what is worth doing? how do you adjust? i think we need to expect the market will drop, 2%, 3%, 4% more. will you have to go back to stocks in a slowing economy. my shorthand for this kind of
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trade, it's the same, repeat after me, it's go buy bristol-myers, because nothing in the middle east will hurt bmy, it will protect you. and i think that the oil stocks have not run nearly enough, so if you believe the war could be worse than i expect be ready to buy the big international dogs and international ones. i do not like banks. they act terribly. the mortgage market has been crushed here and of course, the builders are bullish. so, let's let things come in. and then get ready to put money to work in the softer goods stocks with high yields and we will have the interest rates coming down. here's the bottom line, a lot went wrong, and the market reflects some of it. you have to be ready to buy the bristol myers of the world when the smoke clears. you better have cash to raise the exposure. as terrible as syria can be for the stock market the specter of
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the republicans and democrats going at it is simple more than this market can handle. >> jerry in new york, jerry? >> caller: hi, jim. >> what's shaking. >> caller: first, i want to thank you for your advice and ability call it economic trends with stock performance. others do it and you do it earlier and better. >> thank you, i have a great staff to help me, thank you. >> caller: i bought bhm months ago and it dropped, and i know part of the problem is interest rates but some analysts said that the rates leveled off and will rally $.15. what is going on? >> they have your first initial move, and then you have back sliding and then the next move will only happen when the interest rates go to a level that does not hurt sales. the home builders did not come out and say things are bad. they are still hanging on and
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saying things are good. until they say it's bad, these stocks will not bottom. rameal in new york. >> caller: kaul with the -- i missed out on the buying of blackberry. do i -- >> when they spin off this and that, that means they have not found a buyer for the whole company. on a fundamental basis, it's worth 7, or 8, and it sounds like it's not even worth 10. i don't want to touch it, it's a don't buy, don't buy. a lot has gone wrong, i didn't like today period, end of story, it's time to be prepared, maybe we get a little lift tomorrow and a raise cash. get the defensiveness shopping ready, that will work. "mad money" will be back. hot dish, fast and fresh start up, noodles and company doubled on the first day of trading and took the market by storm.
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does it have what it takes to serve up satisfying returns for years to come? and later, dream stream? netflix has tripled this year, is it at risk on of losing its place in the spotlight. cramer is screening the technicals to give his review when he goes off the charts. plus, drug interaction. the takeover activity in the biotech busy has the street buzzing. so, tonight, cramer is doing a thorough examination to find out which drug makers could be next to be taken out for a hefty premium. all coming up on mad money. don't miss a second of mad money. follow @jimcramer on twitter. tweet cramer #madtweets. send jim an e-mail . usual please.
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him >> in a tough market where it seems everybody is freaking out about a possible u.s. strike unserious that could come as soon as this week come a what exactly is it okay to buy on the way down? you could stock up on defensive stocks orpik some special situations. these are stocks with terrific growth stories that can't be hurt by whatever happens in the middle east. could a stock in a rapidly expanding chain of noodle and pasta restaurants that has the potential to build up 2500 locations across the country fall into the special situation category? it came public at $18 and popped over one hundred cents and has rallied another 16%. it is down more than eight points from its high. the second coming of tripoli, as the ceo was chipotle's chief operating officer before it came public. noodles and company was coming public less than three weeks ago delivering a six sent earnings beat off a $0.12 aces with
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numbers up 18% year-over-year. 14% increase in same-store sales. when you are doing it with a highflying growth stock it is more than in line, which is why the stock got knocked down five box. the stockstill sells for 77 times next year's earnings which is very expensive even for a company with a 21% long-term growth rate and it makes me think you want to wait for the stock to get harder by the weakness before you consider pulling the trigger. however, a fresh story with a new concept rarely comes cheap. we need to learn more about this one. i'm thrilled to have the chairman and ceo of noodles and company with us tonight to talk about his very exciting company and its amazing prospects. welcome to ""mad money"." have a seat be the first of all, those of us who don't know it and then look at the food, went to the web site, immediate reaction is when are you coming to manhattan and when are you going to be able to blanket an area like the new york/new jersey. the answer is you have a lot of runway because you have a lot of places like new york that don't
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have noodles yet. >> we have a little over 350 restaurants to beware comfortable we can have 2500 in the u.s. that's seven times our current size. this food came from one of our great heart owners and franchisees in garden city, long island. we're close to new jersey so we are very disciplined. >> brian sullivan today on street signs had a story which said that colorado is the most over restaurant place in america. how is colorado doing? >> colorado is doing great. one of the things i'm most encouraged by is our mature markets where we have better brand awareness and we've been there longer, we're still building a lot of restaurants. we have plenty of growth. we haven't hit diminishing returns. that gets fantastic and we're still growing. >> these are complex dishes. i go to panera all the time. i go to chipotle all the time. these are not simple dishes to make. >> one of the great things about noodles and company and why we have so little competition, this is complex to do. we have wonderful fresh ingredients. as you can see, the plates we're
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holding up, they are hearty, tasty, great vegetables, and we offer so much choice from healthy to indulgent to our guests. we had a ton of dishes under 500 calories, so you could eat healthy too indulgent, favorites from kids to adults. >> your specials are a traditional in that it is not a happy meal, not more sugar, not more salt. it is asparagus, it is corn. >> we have a real kitchen. we do real cooking. we bring in fresh seasonal ingredients. we make things. it's like you do in your kitchen at home. it's wonderful. >> my daughter worked as a waitress. i worked as a waiter. what kind of tips do i get if i work at a noodles? >> interesting part of our business model, we don't ask for tipping and we don't want tipping. >> you don't want tipping. >> we think that we value serving others. we think inning than a great dining experience is important and a great value and we don't need a tip for doing that.
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>> i went on a's jim cramer on twitter and one dices wait a second, how can they compete with starbucks who is developing a new line of food, panera and chipotle, is there really room? >> i think there is 15 years ago, there was very few fast casual restaurants. now there is close to 16,000. there is a lot of room but one thing why we think we're a category of one is because we offer a world of flavors under one roof and nobody else is doing it. >> a united nations of food. chip oatley is doing an asian chophouse kitchen. is this too much like that? should they be worried? should you be worried? >> i think there is a lot of space in the u.s. for great restaurants. we're very different. global flavors, a lot a variety, a lot of choice. there is a lot of concepts that are a little more niche oriented. there is the chophouse, a little more southeast asian. we have much greater variety. i've got a doctor vegan, kids who care passionately about genetically modified food.
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are you concerned about these things? >> people today, one reason why fast casual has grown so much as people want to feel good about the choices they're making. one of the best things about our dishes as we have real cooking. we don't start your dish until you order it and every dish is customizable. our dishes can start vegetarian and you can pick organic tofu or natural pork on top. a lot of flexibility. >> how important is this notion? chipotle mated food with integrity. is your food healthy for the consumer versus other companies in the sector? >> absolutely. i think all of us in the restaurant space want to be responsible and allow people to have good choice. we put the choice in the guests hands. we don't try to control it. you can eat healthy to indulge and we have hundreds of combinations under 500 calories. you can enjoy dishes we recommended or you can do anything you want for your own diet concerns. >> how do you get people to work without tips? you live by the tip as a waiter?
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>> true in some concepts. for us, a lot of us, there is the economic side of it. you've got to pay competitively. you've got to have a good salary. the great part about working for noodles and company is the pride and passion everyone has with the opportunity. a lot of growth offers tremendous career opportunity on the way up and if you hire surprisingly nice people that value serving others, they are trying to make sure the guest is happy. they're not trying to get a tip. >> cheryl batchelder last week, afc enterprises, they promote from within. a lot of cook's open up as franchises. at domino's most of the people who own dominoes started as drivers or started making pizza. chipotle, great training program. i want to work at noodles and own a franchise, what do i do? >> if you are passionate we look at a lot more integrity characteristics. if you are genuine, if you are friendly, if you are competitive, smart and can work with slightly unreasonable expectations we can teach you the skills to be successful in
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the restaurant business. we want folks that are nice and fun and enjoyable and if you enjoy food and serving others you can be very successful that noodles and company. >> great stories don't come cheap. 77 times earnings but this is a great place to go if we get driven down by seery up. this has very little to do with what's happening over there. now you see why i'm so entranced by this story and i'm going to take a break and do some eating. stay with cramer. >> coming up, dream stream? netflix has tripled this year but is this blockbuster stock at risk of losing its place in the spotlight? cramer is screening the technicals to give his review when he goes off the charts.
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>> this week we're taking a closer look at cold stocks that have made incredible, somewhat improbable moves higher. others call them absurd. i took you through the reasons why tesla motors has toppled since the beginning of the year. that is a classic cult stock if there ever was one. tonight we're getting a sense of what is next for this market, another big cult stock, netflix, which has tripled since the beginning of the year and run up some of 413%, fivefold increase since last september. you know that i think netflix have got a rapidly growing list of subscribers and nobody else in the list can come close because netflix has too much mind share, not to mention some
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terrific original programming like arrested development featuring yours truly, house of cards and a very dark and some say funny, but my sister doesn't and i don't think either, orange is the new black. netflix is trading at 84 times next year's estimates and there is no way to justify buying this one on a traditional valuation basis. that's why we're turning to the charts with the help of bob lange, a supersmart technician who is the founder and senior strategist at explosive options and my colleague at the street. when line looks at the technicals he's got one conclusion. forget ciriaco. forget the budget wrangling. netflix is going higher. he thinks it has the best chart in this entire stock market. if you want to understand a stock that has already rippled for the year can keep on rolling, we're going to explain how that is possible. first let me point out that lange has a real stellar track record when it comes to technology. back in february he looked at the charts and told us that tech lapse would have four new leaders which he named fang based on their names.
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facebook, amazon, netflix and google. 's fast-forward to today and those stocks are up an average of 28%. yep, lang nailed the tech, especially netflix and facebook. he nailed the casino stocks, in particular caesar's back in march. he nailed priceline when it was still under $700. a month ago he told us to by northrop grumman. pick up $5. better than a sharp stick in the eye, which is why when lange tells us that netflix is worth buying way up here at its all-time high, we've got to pay attention, right? if it takes out its all-time high who knows where this thing is going? take a look at netflix daily chart. you can see that netflix just broke out above a pretty powerful ceiling of resistance. and lange points out that that breakout happened on strong volume. remember, for technicians volume is like a polygraph and a higher it is the more likely the move is telling the truth. this breakout in netflix now has a floor of support that 270,
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only six points below where the stock is trading right now. just a little more than 10% away from its all-time highs. lange also notes that every time netflix dips, buyers seem to pick up stock aggressively, which is something you very much want to see in a chart because it indicates there is strong demand every time it gets hit. that's really important epc that, buyers, buyers, buyers. check out some of these indicators at the bottom of the chart because they're very important to lange's analysis. first there is the moving average convergence divergence indicator come a which chartists used to measure momentum and attacked changes in the direction or velocity of a stock's moves. about a week and a half ago this indicator made a bullish crossover. that's where the black line crosses. see that above the red one? this is a powerful buy signal that we used to good effect in many stocks. they're the starting to flash by right he for netflix recent breakouts. you can see that's about to
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happen. it's still signaling that the stock should be owned here, something that lange finds extremely encouraging. then look at the very bottom, the last thing. that's the williams percentage are oscillator which is indicated by larry williams, very similar to the standard stochastic oscillator we often see in this segment because both show whether a stock is overbought or oversold. and netflix is very overbought. typically the stock had come up to far, too fast. in this case as is often when lange does the work, the oscillators become embedded, meaning netflix has already been stuck in overbought territory for some time and it could stay that way for a lot longer. in other words it looks like people keep buying this one hand over fist, sending it higher and higher on the jackie wilson style, still. let's take a gander, which means look at netflix weekly chart. when you look at the williams percentage are oscillator at the bottom of this one you can see
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exactly what lange means by embedded. netflix has been overbought all year and the stock keeps roaring higher. i couldn't believe it. i've never seen a stock be overbought all year. what staying power! there is more going on here that lange likes very much. netflix completed a gigantic, one of the largest i've ever seen, cup and handle pattern that goes all the way back to 2011. this is a giant cup and handle pattern. important because the cup and handle is one of the most reliable bullish patterns. it looks like a cup formed by a bottom followed by a period where the stock trades in a tight range which looks like a handle. you typically see a fabulous move higher and that's exactly what netflix is experiencing right now. this is incredible. what else is it? back in june, netflix 50 day moving average, short term measure of trajectory, above its 200 day moving average. that's a longer term measure of the same thing. to technicians, this is known as
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a golden cross, because it indicates that a stock is growing much better now than it has in the past and for the chart inclined is practically the ultimate. that's the ultimate i signal. at the end of the day chartists are always trying to find the strongest in the market. right now there is nothing stronger than netflix. for the chart buyers out there and the even larger cohort of closet chart followers, few things are working better than netflix. based on bob lange's interpretation he thinks that moving netflix could be far from over and this stock could be making all new highs in the not-too-distant future despite how crummy the market is. i had to say come on, bob. he says it's okay. i know that flicks is a cult stock and while it's fine and even sensible if you don't find comfortable to own, you never, ever bank against one of these cult names. that is a recipe for disaster. rose mary in kentucky.
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rosemary. >> hi, how are you? >> pretty good. how are you? >> fine, thanks. i wanted to get your input and advice on priceline and yahoo. >> well, which priceline and he'll yabu. >> yahoo, i had a debate with my friend david faber today. he said the jury is still out on yahoo. i said marissa mayer is doing a great job. the jury is back and it's innocent. priceline can go higher the cause it's the great bargain. we like priceline fundamentally and we like it technically. bob in new jersey. >> hi, jim. i bought some pandora last week. i like its business model and advertising revenue. but since it's going down and now i'm hearing some buyout rumors. >> i am getting nervous about andorra because you've got the
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spot of 5, you've got the songs, maybe apple lurking. i say no way pandora. it's had its day. sit back, grab some popcorn and enjoy the show that is the netflix chart. the charts are saying this blockbuster could be hitting all-time highs. here it is. the golden cross. don't move. "lightning round" is next. >> still ahead, drug interaction? the takeover activity in the biotech is has the street buzzing, so tonight cramer is doing a thorough examination to find out which drugmakers could be next to be taken out for a hefty premium. >> tomorrow, kick off the trading day with squawk on the street, live from post nine at the nyse. >> you go back to your playbook. don't have to think this, david,
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. >> "lightning round" is sponsored by td ameritrade.
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>> it is time. time for the "lightning round." rapidfire calls. plate to the sound and then the "lightning round" is over. are you ready, ski daddy? start with gilbert in new york. gilbert. >> caller: hey gym. >> jo. >> caller: what's going on? i would like to know about activision. >> it's actually finally woken from its slumber. we have a lot of fourth quarter introductions of hardware so i'm going to say rather than sell, don't buy. let's go to lorraine in minnesota. >> caller: thank you for taking my call, mr. cramer. >> you're welcome. >> caller: i listen to and watch you all the time. i have had a an ax and sold a profit for it and now i'm wondering if i should buy some more. >> i don't want to be in latin america right now because it is emerging markets and they're being hit in this will get hit with them. dean in washington.
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dean. >> caller: this is been. >> you're up. >> caller: okay. hey gym. i taught my son to invest about 40 years ago. now he's buying investment guru. intel, five *and microsoft, three times. what is your opinion? >> these are no growth. intel is being buoyed by the dividend. that's terrific. microsoft had maybe a new ceo. these are not stocks i can get behind because they don't have the growth. let's go to art in wisconsin. >> caller: hello, jim. thanks for taking my call. >> absolutely. >> my question is on mylan laboratories. >> i'm surprised it's doing as well as it is because it's a commodity player that does generics. i want to sell that name. i don't see the value added. bob in florida. >> caller: jo ap listen, jim. first i want to thank you. we had a group of investors here from new jersey and you are
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responsible solely for putting three of our grandkids through rutgers university. >> that's fabulous. thank you. >> caller: sandridge ptsd. >> that is problematic. they were on that terrific panel at the delivering all for conference. a terrific spec. we know oil has gone up since then ebi regarded as a total spec but the specs are very dangerous in this market because a lot of things are wrong. it is a pure spec to be accept that and maybe moveon. thank you for those kind comments about rutgers. amy in maryland. >> caller: last night you talked about checkpoints and it's up over about 20%. i was wondering why you didn't mention it as a security company and what's the difference? >> i don't know. i just know that checkpoint is an israeli company. i do want to point out that there is-one of the reasons it is kind of interesting is
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because the bring your own device movement has made it very hard to reach the cloud. but then again i still recommend fortunate as the one that i would be in. i need to go to mark in wisconsin. >> caller: the cfo from unigen bailed out today. is this a time to sell or should i be buying more? >> i didn't like the fact that he was also named the acting cfo. that was a big job to be the cfo and the act the fo. this has become a wait and see. i want to see who they get as a cfo. i didn't like this and i like him unigen. this is a red flag. i'm throwing the red flag anytime you have one of the situations. alex in wisconsin, alex. >> and with the pullback in stocks this week because of ciriaco, do you think tonight would be a good time to buy some urban outfitters? >> that's exactly what i was thinking. you should circle back to the winners in these markets and urbain is one of the winners. keep your eye on tjx. urban is right.
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you've got horse sense. kevin in illinois. >> caller: hi jim. northwestern wildcats to jan. >> absolutely. we hardly ever see them in the tormey anymore. >> caller: my question is about new residential. >> yeah, you know what? these residential housing mortgage related plays. i've got one thing to say about all of these. sell, sell, sell. this is a taper nightmare. a nightmare to a taper would probably be like a cougar or something. this is a jaguar. this is jaguar paw. if anybody knows that movie. bingo. and that, ladies and gentlemen, is the conclusion of the "lightning round." >> the "lightning round" is sponsored by td ameritrade. >> 1,000 points in just a few minutes. >> machines gone wild.
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>> was there a glitch? >> never in history have there been more doubts about this market. >> nasdaq trading has been halted. >> feel like the odds are stacked against you? some people feel like the game is not worth playing but i know that together we can win. >> jim cramer, leveling the playing field for all. >> i'm not walking away from this market and you shouldn't either. huddle up. >> "mad money" kicks off weeknights.
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>> in the wake of amgen's huge takeover of onyx pharmaceuticals, for $125 a share, nearly a 50% premium before the bidding war began, we need to ask one simple question. who is next? i think we could be witnessing the beginning of a merger wave where small biotech firms with terrific pipelines get acquired by gigantic drug companies that are desperately in need of new sources of growth, just like the amgen/onyx deal. there are a whole number of reasons.
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these mergers are win/win. amgen stock jumped $8 or 7% on the news that onyx had accepted their offer. for anybody who owns shares, you made a bundle. it's not just this one deal. two years ago gilead sciences, another biotech giant whose growth was slower at the time shelled out 11 billiards in cash for a little drug company valued at 5. $5 billion before gilead offered a 90% premium to get its hands on their red-hot hepatitis c product. gilead was almost universally condemned for overpaying by a ridiculous amount but gilead has rallied an astounding 226% since the deal was announced. now the critics look like jokers because the stock trades mainly on that hep c platform gilead picked up. it's worth it for these lumbering form a but he mets to pay through the nose for small biotech outlets with promising pipelines, especially as borrowed money is still very cheap and very available. this kind of acquisition can breathe new life into an old dog
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by fueling growth, increasing earnings down the road especially in the out years and giving management something new and exciting to talk about with investors. that's why amgen worked yesterday. the bidding war didn't really develop. the company went from a helpless giant to a player with a sexy anticancer franchise including onyx terrific kidney and liver cancer drug as well as a drug for multiple myeloma, a big drug, both of which are already on the market and an outstanding pipeline of oncology drugs in the works. it's not like the other big pharma come bennies are blind to what's happening here. they know they need to find new sources of growth and a smart biotech acquisition could be the way to do that. the chairman of novartis said, and i point, consider a $10 billion purchase among other options for bolstering the business. there are a bunch of players who could afford to do a $10 billion biotech acquisition. we know pfizer is rumored to be interested in onyx. now they'll have to find something else to buy. merck could afford it, so could
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j and j or glaxo smith kline, sanofi, bristol-myers or bayer, and all of them would benefit from some transaction, which brings us to the key question, who is next. when i say who is next i'm not referring to the seminal album by the who, although i bet that pete townsend did a great job in that won't get fooled again. i saw it last year. we want to find out which of the smaller biotech's will get snapped up and given that $10 seems to be the magic number on the what amgen paid for onyx and what iliad paid and what novartis said they would shell out for an acquisition. we did a screening of biotech companies with market capitalizations between $2 billion and $10 billion. there are three names that you better write down because they stand out as ideal. meditation, seattle genetics and bio marin. we're all familiar with these, right? meditation is a 2. $45 billion biotech in the cancer fighting business. about nine years ago they launched a drug that's approved
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for men with castration resistant prostate cancer in the u.s. europe and canada. as you can probably tell from the name, castration resistant prostate cancer is tough to treat as well as being extremely lethal. patience who took it survived for 18.4 months, 4. 8 months longer than the placebo. mock plus taking it lead to a 37% reduction in the risk of death. drug is already generated $230 million in sales and it could ultimately do peak sales of $2,200,000,007 or 8 years from now. on top of that it has a bountiful pipeline. the country has a phase three study testing patients who have yet to receive chemotherapy and we should get results in a couple months. at the same time it is testing against a.j. and j's prostate cancer drug. many urologists think they have the better product because it doesn't require the patient to take steroids. every time you hear good news j and j goes down. the company has a breast cancer drug in phase two.
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nearly $250 million in cash so the company should turn a profit next year. if the prostate cancer data that comes out in the next couple months is positive i could imagine them catching a bid on a big one that could trade at a major premium. next company you you should be familiar, seattle genetics. $5 million biotech that ball's targeted anticancer treatments. we love targeted anticancer drugs. these anti-body based technologies attack tumors without poisoning the rest of the body. like precision bombing versus nighttime saturation. the stock has rallied 68% since december. we like the stock and we hate carpet bombing drugs. we like targeted drugs. the big drug has already been approved for relapsed hodgkin's lymphoma. the first new treatment for that disease in 30 years. right now this drug is already in four different phase three expansion trials including t-cell lymphoma where it has been fast tracked by the fda. we know that big pharma believes
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in seattle genetics target oncology platform because so many major drug companies have licensed in front of them. abbott labs, meyer, genentech and pfizer. they could be looking at a $3 billion deal with potential milestone payments. they get $3 billion coming in. wow. will one of the big boys really pay $10 billion for seattle genetics? pharma sets, 90% premium. onyx, 50% premium. maybe $3 billion is too wide but i could see seattle genetics being taken over for $7 million or $8 million. this is not a serious worry story. last but not least amah actually maybe last and best, i don't know. bio marin, $9 billion biotech focused on drugs for rare metabolic diseases that can cause immense damage if left untreated. bio marin has got a number of these orphan drugs in the market and even more in its pipeline as well as a novel breast-cancer treatment in early-stage
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development. we'll see if bio marin is the better play. i don't think management would accept the takeover bid. $11 billion, $12 billion, absolutely. that is a do. here is the bottom line. we could be in the beginning of a wave of biotech takeovers by big pharma companies that are starved for growth. we never buy a stock solely for takeover speculation but we need to know whether the fundamentals are sound. we got into a spot of trouble in this market because of ciriaco and washington. there is no real hurry to buy these. even if these are the kind of stocks that are most affected by the stumbling blocks. with these in mind i think inactivation and seattle genetics are in the sweet spot here and bio marin gives you a less risky way to play the exact same theme. "mad money" is back after the break. in a world that's changing faster than ever,
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we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present.
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>> time for some harsh truth. every time you produce energy you hurt the environment in some fashion. any time you extract fossil fuels from the earth you get a hazardous reaction. i wasn't shocked to read about the danger of fracturing and how it's causing tremors in the eagle ford shale as oil company after oil company discovers more in the ground. i'm not saying earthquakes and tremors mean nothing. they need to be monitored. fossil fuels. drill baby drill. i'm just being a realist. we need to get our energy from somewhere. no one is ever satisfied about the side effects. coal causes black lung.
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nuclear, let me say fukushima and leave it at that. oil and gas cause global warming, spills and earthquakes. severe economic pain for the less wealthy and other precious resources, water takes tons of water to make this product that nobody seems to want in the first place. it's a fact of life. you can't get energy without doing some damage. we could decide that what we want to do is import oil and gas from other countries to make our nation less prone to earthquakes. doesn't that have consequences, too? much of the oil would have to be from the middle east where the countries have great ideological differences from us and oil money has at times financed terrorism. i'm not saying we could avoid ciriaco if we were energy independent. i'm saying the situation would be less hard to work. far more freedom of action to defend ourselves. it also improves our trade balance and creates a huge number of jobs. the penalty, tremors, spills. when we use natural gas not only do we promote north american energy independence, not only do we produce more jobs, we make the skies cleaner because nat gas is the least dirty fossil
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fuel around, cleaner than coal or oil. that doesn't necessarily make it a win but it is less of a loss than if we import oil from regimes that are unfriendly to us and can use the money to arm our enemies. i know that tracking has consequences but nowhere near the consequences of coal, which according to sierra club causes premature deaths every year. every coal plant could be turned into a natural gas plant but that would generate too much economic hardship and i don't favorite. i love it in principle but not in action. before we eliminate fracturing can we put a stop to the stripmining and and the black lung, the acid rain, the mercury that comes from gold? it would be terrific to power surface vehicles with solar or wind. that's not practical and it won't be 4 years or even decades to come. we could hook them into the grid and use as many teslas as we can manufacture but we also have to be cognizant that we don't have the technology to hook up everyone. i read the stories and i say here we go again.
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another solar, oil and natural gas like the last one, gas land, water contamination. one where energy extraction will always be american fossil fuels, natural gas are a heck of a lot evil than any of the other real alternatives to be stay with cramer.
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>> seamy? see where this bat is? it's on my shoulder. it will remain there until i feel we have more of an all clear. there is no reason to do any swinging. we're going to get a better opportunity. always a bull market somewhere. i'm jim cramer and i will see you tomorrow. to work at a higher interest rate, call me. if you want to make some money signing some papers, loan your credit, call me. if you have some unused collateral sitting around, you're not making any money with it, call me. >> narrator: he claims to be a real-estate investor extraordinaire... until the money stops. >> "well, you've got to start putting that money to work." that's what we need it to do. we did. >> narrator: and no one is safe from this golden boy's allure. >> he has the charm, the charisma, the personality, the good looks. i've seen some real pros in my life, but he was the best of the best. >> and at that point, the scales


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